The American coal industry is down more than $1 billion in the past week after the price of a commodity plummeted as a result of a major price drop in coal production in China.
The decline in coal prices led to the closure of more than 500 coal-fired power plants across the United States and the U.K. Coal futures dropped as much as 15 percent Friday on news of the collapse in China, and it was down more on Monday than in the previous 24 hours.
The drop in the price for U.S. coal rose as much on Monday as in the first 24 hours of the week, according to data from FactSet, which compiles data from a wide variety of sources.
The price dropped $1,716 per ton in New York, $2,621 in New Jersey and $2.2 million in Pennsylvania, according the FactSet data.
The coal industry in the U .
S. has been reeling since the start of the year amid a glut of cheap coal.
In the U ‘s largest coal-producing states, the decline in demand is causing coal prices to fall even more.
In West Virginia, for example, the price dropped nearly $1 per ton to $1.,082.39 per ton on Monday.
“The decline in U.s. coal is an important signal to investors that China will remain a significant producer of coal, and will continue to do so as long as China continues to rely on cheap natural gas to meet its energy needs,” said Matt Schumacher, senior coal analyst at FactSet.
In a recent report, FactSet said the Chinese government has “made it very clear that it will continue its policy of increasing coal use in the near term to offset the expected decline in Chinese demand.”
China is the world’s second-largest coal producer behind the United Kingdom.
In March, the Chinese National Energy Administration said that coal production is expected to rise by 20 percent this year and 25 percent in 2022.
China has also announced plans to boost coal production to 20 million tons by 2026.
The U. S. coal industry, which has seen coal prices slide about 70 percent from the end of 2016 to the beginning of 2017, is still reeling.
The average price for a ton of U. s coal fell about 40 percent between April 15 and May 2, according in FactSet’s data.
“U.S.-China relations have taken a beating in recent months, with the Chinese foreign minister and president expressing concern about a potential decline in China’s energy needs and China’s coal consumption,” Schumberger said.
In response, China has imposed restrictions on coal imports and export.
China “will be looking to increase the supply of coal domestically and boost the amount of imported coal,” he said.
China’s economy is suffering due to a global economic slowdown.
China lost nearly half its economic output in 2016.
In May, China suspended new coal mining projects in the United Sates and the world.
The World Bank reported that coal demand in China has been declining since the end.
“This is not the end, but it is a long-term slowdown that has not helped the coal industry recover,” said John Reilly, chief market analyst at Cargill.
The collapse in coal is the latest in a string of bad news for the coal sector.
On April 27, the U